Fraudulent transactions hitch for e-commerce growth
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Interbank network provider Artajasa Pembayaran Elektronis says that the popularity of conventional payment methods in e-commerce has made the sector prone to fraudulent transactions, creating potential obstruction to the growth of e-commerce in Indonesia.
Artajasa information technology (IT) and operation director Bayu Anantasena said in Jakarta on Wednesday that fraudulent transactions happened due to the lack of a payment authentication procedure in conventional payment methods, including bank transfers and cash-on-delivery (COD) payment.
The company records that 75 percent of Indonesian e-commerce customers make payments through bank transfers, 20 percent through COD and the remaining 5 percent through credit cards and other methods.
“Fraudulent transactions occur due to a lack of authentication between e-commerce merchants, issuing banks and customers. As e-commerce businesses grow in Indonesia, transaction security becomes more important for their development,” he said.
The government expects that by 2020, that nation will record US$130 billion in e-commerce transactions, in line with the country’s anticipated digital boom in following years.
As many as 87 issuing banks are currently using Artajasa’s ATM Bersama network, including Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Tabungan Pensiunan Nasional (BTPN).
Questions & Answers
Q.What is the primary reason for fraudulent transactions in Indonesian e-commerce?
What is the primary reason for fraudulent transactions in Indonesian e-commerce?
Fraudulent transactions occur because conventional payment methods, such as bank transfers and cash-on-delivery, lack a proper payment authentication procedure. This creates a gap in authentication between merchants, banks and customers.
Q.Which payment methods are most commonly used by Indonesian e-commerce customers?
Which payment methods are most commonly used by Indonesian e-commerce customers?
Most Indonesian e-commerce customers, 75 percent, use bank transfers. Cash-on-delivery accounts for 20 percent of payments, with credit cards and other methods making up the remaining 5 percent.
Q.What is Indonesia's projected e-commerce transaction value for 2020?
What is Indonesia's projected e-commerce transaction value for 2020?
The Indonesian government anticipates the nation will record US$130 billion in e-commerce transactions by 2020. This projection aligns with the country's expected digital boom in the coming years.